The Regulatory Paradox Of Ease Of Doing Business And Strict Enforcement: A Multi- Domain Doctrinal Analysis Of Corporate Governance, Sustainability, And Financial Regulation In India (2025–2026)
Arun Dahiya, LLB, Bharati Vidyapeeth, Deemed University
Rachit Spall, LLB, Bharati Vidyapeeth, Deemed University
ABSTRACT
The modern Indian corporate regulatory framework is experiencing a profound structural transition, characterized by a sharp divergence between the state’s stated objective of enhancing the "Ease of Doing Business" and the parallel construction of a highly rigorous, audit-grade enforcement apparatus by corporate and market regulators. This comprehensive doctrinal study evaluates the systemic friction resulting from this regulatory paradox across five key domains. Specifically, it analyzes the introduction of reasonable-assurance mandates under the Securities and Exchange Board of India (SEBI) Business Responsibility and Sustainability Reporting (BRSR) Core framework and the associated value-chain bottlenecks for Micro, Small, and Medium Enterprises (MSMEs). It evaluates the transition to scale-based materiality thresholds for Related Party Transactions (RPTs) under the SEBI Listing Obligations and Disclosure Requirements (LODR) Fifth Amendment, 2025, alongside the landmark Linde India Ltd. v. SEBI ruling by the Securities Appellate Tribunal (SAT) on transactional aggregation and economic substance. Furthermore, the study examines the decriminalization of corporate defaults under the Jan Vishwas framework and the parallel constitutional concerns regarding the transfer of judicial powers to In-House Adjudication Mechanisms (IAM) administered by the Registrars of Companies (RoC) and Regional Directors (RD). Additionally, the report investigates the integration of Indian Accounting Standards (Ind AS) with the Organisation for Economic Co-operation and Development (OECD) Pillar Two Model Rules under Ministry of Corporate Affairs (MCA) G.S.R. 169(E), alongside the operationalization of Central Bank Digital Currencies (CBDCs) in corporate treasuries. Finally, it reviews SEBI's latest operational risk rules, transparency mandates, and structural reporting overhauls for Alternative Investment Funds (AIFs) and Market Infrastructure Intermediaries (MIIs). The report synthesizes these findings to propose concrete legislative and policy interventions aimed at resolving regulatory friction and preserving constitutional boundaries.
Keywords: Business Responsibility and Sustainability Reporting, Related Party Transactions, Jan Vishwas Act, In-House Adjudication Mechanism, OECD Pillar Two, Central Bank Digital Currency, Alternative Investment Funds, Market Infrastructure Intermediaries.
